Bank of Singapore expects more optimistic but not hawkish MAS

SINGAPORE (Oct 6): We believe the Monetary Authority of Singapore (MAS) will leave its neutral policy stance unchanged at its meeting in October. The MAS is likely to maintain the “rate of appreciation of the S$NEER policy band at zero percent” with no change in the policy band width or mid-point.

Markets will be paying particular attention to whether the MAS removes its forward guidance of an “extended period” of neutral policy stance or downplays its significance, which could be taken to mean a tightening move soon.

This “extended period” phrase has been included in the statements since October 2016. Recent strength in the S$NEER seems to be anticipating a less dovish MAS that is poise for a not-too-distant future tightening move.

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